NCLAT accepts settlement plan between Byju's and BCCI, edtech giant gets breather from insolvency proceedings

The National Company Law Appellate Tribunal (NCLAT) on August 2 accepted the settlement arrived between Byju Raveendran and Board of Control for Cricket in India (BCCI). 

NCLAT accepting the settlement between BCCI and Byju’s means that the insolvency proceedings against Think and Learn (parent company of Byju’s) will be stopped and the firm will come out of the control of the Interim Resolution Professional (IRP) appointed by the NCLT Bengaluru last month. 

The development comes as a respite for the beleaguered edtech company, which has been plagued by boardroom exits, tussle with investors and a collapsing valuation. 

NCLAT accepted the settlement between Byju’s and BCCI (operational creditor) after recording an undertaking that the repayment is being personally funded by Riju Raveendran (brother by Byju Raveendran) and not taken from money that should go to financial creditors. 

The BCCI informed the National Company Law Appellate Tribunal (NCLAT) on August 1 about settlement reached with Byju’s on the repayment of over Rs 158 crore due to it by the edtech company under sponsorship deals.  

The settlement plan was opposed by GLAS Trust Company LLC, one of the US-based creditors of the edtech firm, which termed the repayment ‘tainted’ and being funded with ‘stolen money’.  

Senior advocate Mukul Rohatgi, who represented the US-based creditor, alleged that both Byju Raveendran and Riju Raveendran conspired to siphon off over Rs 500 crore, as per the findings of a US court. 

The creditor urged the NCLAT to direct Byju’s to file an undertaking that the money being paid to BCCI is not Byju Raveendran’s.  

Solicitor General Tushar Mehta, who also appeared for the BCCI, said the creditor's concerns were based on assumptions, according to Bar & Bench. “BCCI will never condone any money that has come surreptitiously,” Mehta said.  

Counsel Arun Kathpalia, representing Byju Raveendran, sought some assurance be given to ensure that the insolvency process against Byju’s does not come in the way of the proposed settlement.